If you’re an entrepreneur, then you know what it means to be busy. There just never seems to be enough time in the day to get everything accomplished.
And while you would love to hire an assistant, hiring one locally is going to be too expensive.
Many entrepreneurs have discovered that they can get the same quality of work by hiring someone overseas in places like the Philippines.
On a hot Tuesday evening, I had the opportunity to interview Rob Rawson, the CEO of Time Doctor. He revealed to me that he has retained at least one personal assistant from the Philippines for the past 10 years. In this article, Rob provides a complete strategy for hiring and managing a high-level virtual assistant at local Filipino rates. He currently employs just under 50 staff members with 12 people working in virtual assistant capacities. (I’ll delve into these later in the article).
The Expense of a Full Time Employee
As you know, hiring a full time employee can be extremely expensive. But do you know just how expensive it can be to hire an assistant in the U.S.?
First, according to The Association for Talent Development’s (ATD) 2014 State of the Industry report, U.S. businesses spend $1,208 on the average employee for training and development, and this goes up between one and three percent per year.
Second, U.S. employers are mandated to pay a plethora of payroll taxes, including federal and state unemployment tax, Social Security and Medicare taxes. For example, if an employee is earning, $35,000 per year, then the employer will dole out $4,340 in Social Security and $1,015 in Medicare taxes. This is expensive for businesses that have to compete in a global economy.
For further information on tax rates, you should check out Accounting Coach here.
The chart below shows the historical payroll tax rate, using data from the Tax Policy Center. As the chart highlights, payroll taxes just continue to go up in the U.S.
Why Hire A Virtual Assistant?
A virtual assistant, otherwise known as a VA, is self-employed and offers clients administrative, creative, legal, technical and personal assistance from their home office, or office-sharing environment.
Since VA’s are typically freelancers and independent contractors, clients do not have the burden of carrying overhead expenses such as payroll taxes, benefits, and insurance that comes with the standard full time employee.
The global VA industry is growing rapidly. This is made possible because of a variety of factors:
- Technology has made it easier to communicate with anyone across the globe.
- Businesses are attempting to reduce the cost of labor and increase profits.
- Professionals seeking a more flexible work schedule. for more flexible time. It is estimated that there are approximately 25,000 professional VAs worldwide
One hotspot for VAs is the Philippines. A simple Google search will showcase an incredible amount of results for both independent VAs and VA companies. The Philippines has essentially become the hub for a large chunk of VAs. And entrepreneurs are taking notice of the fact.
Buying Work Life Balance
Robert Rawson hired his first Filipino VA more than a decade ago. Today, he has a handful of VAs completing an array of tasks, from personal assistance to conducting online research for his ventures.
For instance, Mary, one of Rob’s VAs researches travel arrangements such as hotels, accommodations, Airbnb, prices, etc. She also assists him in his personal life by helping Rob and his family move. She finds moving companies, compares prices and then books an appropriate time for him and his family to move. Mary will even research items he wishes to purchase and then finds the cheapest price and other alternatives.
Rob describes Mary as a lifesaver. Literally. Because ever since he hired her, Mary has allowed him to get his life back. He is able to work hard on TimeDoctor and maintain work-life balance.
And what’s in it for her?
Mary wanted to spend more time with her family while at the same time still earn a living. So she stepped down from her position and took up virtual assisting. Now she has more time for her family, she still maintains a career and receives a paycheck.
How to Hire the Right VA
Now that you know the benefits of hiring a VA, let’s talk about exactly how to get this done.
The ability to find and hire the right VA wasn’t something that happened overnight. Instead, it was a rigorous process of job advertisements, currency conversion calculations, funneling and tests.
Budgeting for a VA
“If you’re hiring a full-time assistant, it’s important to convert their pay into a local salary,” said Rob.
OnlineJobs provide users with salaries in Philippines at local rates. Your rate shouldn’t necessarily be higher than a local job because the person is working from home, and a lot of people want to work from home. In some cases they’re willing to work for flexibility and less than 40 hours.”
One mistake that many entrepreneurs make when they hire a virtual assistant is they will often hire someone simply because they are the cheapest person available. Rawson cautions entrepreneurs by reminding them that you get what you pay for. The cheapest person available may also provide you with the lowest quality of work. Then you will be forced to hire and train a new virtual assistant.Rob’s philosophy is to find someone who has a high level of skills, which may indeed come with higher pay (30,000 pesos is equal to $660 per month). But it’s worth it.
“They (Entrepreneurs) should always go for the higher rate,” suggests Rob, who believes this strategy will come with greater effectiveness.
What kind of rates will you pay for a VA in the Philippines?
- Basic VA with data entry or web research skills 12,000 to 18,000 pesos /month or $260 to $400
- Intermediate VA with perfect spoken English 18,000 to 30,000 pesos /month or $400 to $650
- VA with Article / Content Writing skills: 20,000 to 35,000 pesos/month or $440 to $770
- VA with SEO / Web Marketer skills: $550 to $2200/month (This is a very in-demand skill and there are very few people who truly understand SEO)
- VA with Web Developer skills: 30,000 pesos to 120,000 pesos/month (depending on the skill level and where they live) $660 to $2,600
While these rates are simply guidelines, they provide you with an indication of how much you can expect to pay for high quality work in a variety of different business functions. (Note: rates in Manila are much higher than in smaller cities.)
Identifying a Job Description
Just like you would if you were hiring a full time employee, entrepreneurs need to create a job description for their ideal virtual assistant. Some examples of the types of jobs a virtual assistant can do are:
- Personal Assistance
- Website Development
- Receptionist Duties
- Content Creation
- Customer Support
Depending on the type of work you’re looking to outsource will greatly impact the skillset of the virtual assistant that you hire.
Creating a Hiring “Funnel”
Once you’ve created your job description, then it’s time to start searching for the right candidates. Rob likens it to a funnel process. He notes that each hiring initiative should receive a minimum of 50 applicants and a maximum of 300, which can be accomplished through employment websites, LinkedIn and referrals.
The next step is to filter out the qualified applicants from those that are unqualified.. In most cases, Rawson says, you can easily eliminate about 70% of the applicants based on poor quality English, a weak resume, or entry level experience. Once you have determined the most qualified applicants, you provide each one with a test; each examination depends on the tasks of the job. The test can range between 15 minutes (unpaid) to as much as three hours (paid). At the end, you peruse the test, evaluate them and you are left with just a few prospects.
The final step is to perform a verbal interview over Skype or Google Hangouts, followed by a 10-hour paid trial period. It’s best to hire a couple of people for this paid trial period at the same time rather than opting for one. “You have to take a lot of action to find the good people,” stated Rob. “You can’t just expect to post the job and hire the first person. It’s not going to work. It’s the same process you should take when hiring someone in the West. If you get 100 job applicants then you know 70 percent are unqualified and won’t be able to do the job.”
The Experience of Taking on a VA
Everyone has their own mix of success and horror stories when dealing with someone hundreds or thousands of miles away. For every 10 great online employees, there is one who can’t seem to hand in work on time or learn from their mistakes. Of course, thanks to customer reviews and website algorithms, those types of workers are being weeded out.
Rob concedes that his VAs aren’t always 100 percent effective and “always on the ball.” He understands that sometimes family can be a distraction or health issues can arise. If the VA’s quality crashed to 20 or 30 percent then there would be cause for concern.
Training Your Virtual Assistant
Rob concedes that you won’t be able to train a VA for every task that they need to perform. For instance, jobs like conducting online research for promotional activities; finding conferences where TimeDoctor could be promoted, or discovering local Meetup groups to sponsor are not something you can teach.
“They have more of a steady task, which is the same every week, something that is a lot easier to manage,” he averred. “If you just have one task, like if it’s a research or development task, then that is a great skill to have.”
However, not every responsibility is impossible to train. When there are duties that do come with a level of instruction and training then he performs video and written training sessions. By doing this, he offers a recording by screen explaining what needs to be done, and then follows up with each VA.
Rob says that once they’ve successfully performed each task it becomes rudimentary for them.
“You can’t provide training on researching a mover,” he said. “If they can’t do that on their own then they don’t have the skills.”
Communicating with Your VA
One of the benefits of being a VA is that you do not have to clock in 40 hours a week. When collaborating with Rob, his VAs work about five hours per day unless they’re on a holiday. They are required to complete between 150 and 160 hours per month.
Rob understands that a VA can feel like a recluse, so he attempts to call his VA’s at least once per week. This helps maintain a solid relationship with his team members, even though they work remotely. These calls cover everything from discussing personal matters to catching up on assignments that have “fallen through the cracks or forgotten about.”
Although he would like to, he doesn’t have the time to complete a daily call. With that being said, Rob stresses the importance of having a weekly phone call. To ensure work is completed, he likes to keep track of everything through any type of project management system, such as Basecamp or Asana.
Paying a VA from the Philippines
Paying workers all over the world can be an expensive and timely endeavor. For instance, PayPal comes with a fee of 4.5 percent, while using a bitcoin exchange in the Philippines can be a lot more than just the advertised one percent.
Rob uses wire transfers to pay his VAs twice a month. The reason for wire transfers is because right now it has the lowest cost possible for transferring money to the Philippines: one percent, which includes the currency conversion fee.
He maintains an accountant in the Philippines to process payment for the Philippines-based team. The wire transfers are then completed by a local bank transfer in the United States, which also comes with a lower cost. Rawson believes these are the best methods of attaining reduced banking fees.
When mistakes happens or there are technical difficulties, the alternative is to utilize a service like PayPal or even Payoneer.
There is an in-depth piece on TimeDoctor’s blog that outlines all of the inexpensive ways of transferring money to the Southeast Asian country. The chart below highlights the cost and time for sending $1,000 to the Philippines.
Overall Experience, Outlook for VAs
So what has Rob’s overall experience been like thus far? Well, after 10 years, he says with glee in his voice that it has been very convenient and useful. He reminisced about the time when he had a personal assistant on salary. She was far less effective, she wasted their time and he could never get in touch with her. Simply put: it was a waste of money.
Although there have been some hiccups with his current VAs over the years, they have usually improved their quality when asked.
“I’ve worked with my current VA for years and years now and sometimes she’s been ineffective or has been distracted by her health issues,” Rob purported. “If I tell her about this, because she’s a diligent person, she improves again and again, and I think that’s kind of a natural process if you’ve worked with someone for a long period of time.”
Rob does believe tasks like booking travel can be complicated so it’s difficult to locate someone to do them well. At the same time, however, not too many people need it and those kinds of tasks aren’t a common need.
The areas that the specialties of VAs really lie in is for online research and lead generation. This is something businesses, big and small, can truly benefit from. Also, a VA can be described for a lot of his team members because they produce blog content, they format articles, they do research for content, they perform interviews and so on.
In the end, hiring a VA will only be beneficial for a company or a professional if they find someone great.
“I don’t think it’s useful unless they find a great person, stick to that person and use that person for many years. In this case, it’s great and saves me a lot of time,” he concluded.
A VA buys you time so that way you can work on growing your business, and not worry about the mundane tasks that keep so many of us entrepreneurs “busy”.